To lure the public to deposit their money in banks and encourage existing bank clients to increase their deposits, Senator Bong Revilla filed a measure seeking to increase the maximum deposit insurance coverage for bank depositors from P500,000 to P1 million.
He cited a 2015 Bangko Sentral ng Pilipinas data showing that four out of 10 Filipino adults or 43 percent had savings, 32.3 percent used to save in the past but have stopped saving money while 24.5 percent never experienced saving money.
The same data showed that seven out of 10 adults or 68 percent who saved money kept their savings at home while 32.7 percent of adults with savings placed their money in banks. The others saved through cooperatives (7.5 percent), non-stock savings and loans associations (0.8 percent) and informal savings groups (2.6 percent).
BSP record also showed that six out of the 10 adults or 62.8 percent with bank accounts indicated that the bank’s reputation is their number one consideration in opening a deposit account.
A 2017 survey conducted by Financial Inclusion showed the percentage of adults with savings increased to 48 percent from 43 percent in 2015.
The aforementioned data prompted Revilla to file Senate Bill No. 1260 amending the insurance coverage for the depositing public.
“Apart from the benefits that individual depositors will enjoy, it will also redound to advantages in the macro level by invigorating our financial system and the economy as a whole,” said Revilla.
Revilla said that SBN 1260, also known as An Act Further Increasing the Maximum Deposit Insurance Coverage, Amending For This Purpose Republic Act No. 3591, As Amended, Otherwise Known As The Philippine Deposit Insurance Corp.Charter, also seeks to increase the present P500,000 maximum insured deposits on joint accounts to P1 million.
Under current laws, joint account shall be insured separately from any individually-owned deposit account.
PDIC, an attached agency of the Department of Finance, is mandated to insure the deposits of all banks to protect the depositing public from illegal schemes and promote financial stability.
A 2019 PDIC and Kantar Philippines Inc. survey showed that 51 percent of 1,500 respondents, aged 18 and above, had experienced maintaining deposits in bank but only half of them or 24.5 percent continued to maintain bank deposits, Revilla said.
Revilla said the bill is in line with the policy of the State to strengthen the deposit insurance coverage system and encourage the public to save and deposit in the formal banking system.